ABSTRACT
The previously isolated socialist Central European periphery has become highly integrated into European production networks, as evidenced by its increasing role in exports. The rapid growth of manufacturing activity is due to successful institutional reforms and the stability provided by membership of the European Union, the common market, high-quality human resources, lower costs and geographical proximity to the core of Western Europe. The region no longer exhibits many of the classic economic and social characteristics associated with the economic periphery. However, despite significant growth, it still relies on foreign capital and lags behind Western Europe in terms of labour productivity and R&D expenditure.
